Generic Medicines a Financial Boon to Patients and Taxpayers

August 03, 2012 03:56 PM Eastern Daylight Time

WASHINGTON--(BUSINESS WIRE)--Citizens Against Government Waste (CAGW) today praised the release of
the fourth annual edition of “Generic Drug Savings in the U.S.” from the
Generic Pharmaceutical Association (GPhA). The report documents $1.1
trillion in savings from the use of generic drugs over the past decade,
with almost half of those savings coming from generic drugs that entered
the market since 2002. Nearly 80 percent of the 4 billion prescriptions
dispensed in the United States last year were for generic drugs. These
trends are critical, since spending on healthcare constituted 18 percent
of the nation’s GDP in 2010, and is expected to climb to 25 percent by
2018.

“Generic medicines continue to have a healing effect, not only on the
patients who consume them but also on taxpayers,” said CAGW President
Tom Schatz. “Since the federal government picks up 29 percent of the
costs of all healthcare spending annually, mostly through Medicare and
Medicaid, and state and local governments pick up an additional 16
percent of such costs, the availability of lower cost generic drugs will
increasingly be an important tool in slowing the mounting expense to
taxpayers of healthcare in the future.”

The report noted that the $1 trillion in savings over 10 years was
massive compared to the original estimates of only one billion dollars
over 10 years following the passage of the Hatch-Waxman Act in 1984,
which unleashed the widespread development of generic drugs. GPhA noted
that additional estimated savings of between $42 billion and $108
billion over the next decade will come from biosimilars, which are
generic versions of biopharmaceutical drugs.

“As long-standing supporters
of making generic drugs widely accessible, this report confirms that
there are real savings to consumers and taxpayers in the availability of
generic medicines. CAGW will continue to support public policy measures
that encourage the timely development and market availability of generic
drugs,” concluded Schatz.